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The Real Pepsi Challenge: How One Pioneering Company Broke Color Barriers in 1940s American Business [Paperback]

Stephanie Capparell
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Editorial Reviews

From Publishers Weekly

Wall Street Journal writer Capparell (author of the leadership book Shackleton's Way) recounts the struggles of 12 of the first black executives hired by any leading U.S. business in this worthwhile but plodding account. They got their break when Pepsi-Cola CEO Walter S. Mack, who was facing an uphill battle against Coke, decided that tapping the "Negro market" would help Pepsi win. He hired Edward F. Boyd, a sometime actor, to create a team of salesmen to push Pepsi-Cola with black customers. The team quickly became community role models, feted in magazines like Jet and Ebony, while Coke enthusiastically backed Georgia's racist governor Herman Talmadge. As a result, Pepsi earned a reputation as the "liberal" soft drink, capturing the lion's share of the cola market among African-Americans. But after Mack fell to a corporate shakeup in 1951, the effort was disbanded. One member of Boyd's team, despite years of success at Pepsi and an M.B.A. from the University of Chicago, later had to take a job mopping floors to support his family. Readers may wish the writing were more adept, yet this account makes clear the incredible barriers to black achievement that existed just half a century ago. (Jan.)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved. --This text refers to an out of print or unavailable edition of this title.

From Booklist

Imagine the state of race relations in segregated America in 1946. Capparell, a journalist, describes the remarkable decision by the Pepsi Company to hire 12 black persons as upper-level salespeople to develop the black market. The team operated for more than four years, and in soliciting blacks everywhere, they surpassed their profit goals. Generating profits was their sole purpose. However, this is also a story of unintended consequences, including introducing diversity into corporate America, revolutionizing the strategies of niche marketing, featuring black actors in ads, and identifying blacks as an important consumer segment. Capparell extensively interviewed the six living members of that team formed 60 years ago who were genuine pioneers in overcoming prejudice within a large corporation and dealing with Jim Crow laws of segregation while traveling. This is a snapshot in time, with its profit successes but also its failures. Although it did not change the business world, it set the stage for ambitious black executives who followed them. Mary Whaley
Copyright © American Library Association. All rights reserved --This text refers to an out of print or unavailable edition of this title.

Review

"The Real Pepsi Challenge is an inspiring story about a small team of pioneers who rose above the prejudice of the times. Their resourcefulness, persistence, and creativity paved the way for the generations that followed."

-- Ken Chenault, Chairman and Chief Executive Officer, American Express Company

"A fascinating view of civil rights history from the halls of Corporate America.The ties among popular culture, marketing, and race relations come to life in this inspiring story."

-- Juan Williams, author of Eyes on the Prize: America's Civil Rights Years, 1954-1965 and Thurgood Marshall: American Revolutionary; NPR senior correspondent and Fox News political analyst

"When you go to work anywhere in Corporate America, you'd better understand that this is no longer the white America of the 1950s. You will fail if you approach it that way. And if you open your eyes and address the rest of our multicultural society, you will succeed. This book shows you why you'd better get on your multicultural game as evidenced by the amazing success of African-Americans who breached the color wall at Pepsi and what it meant for them, for Pepsi, and for America. It is an amazing and inspiring story. This is mandatory reading for those about to embark into the corporate world."

-- Jim Cramer, markets commentator, thestreet.com, and host of CNBC's Mad Money with Jim Cramer

"A well-written and well-researched story of unsung pioneers in the struggle for equality in the American workplace. A must-read for all executives looking for new ideas to diversify their organizations by learning from one of the most inspirational stories in business history."

-- Patrick T. Harker, Dean, The Wharton School, University of Pennsylvania

"A pacesetting book for emerging efforts to give long overdue credit to the historically ignored, the historically neglected, and the historically forgotten in the 1940s and 1950s, who through their sacrifices helped quicken the death of Jim Crow America. It reminds us how far we've come toward building an inclusive society since these pioneers paved such transformative paths -- and how much work is left to do."

-- John H. Stanfield II, author of Philanthropy and Jim Crow in American Social Science

About the Author

Stephanie Capparell is the author of Shackleton's Way: Leadership Lessons from the Great Antarctic Explorer. She has worked at The Wall Street Journal since 1990 and is currently an editor for that paper's Marketplace page. She holds

Excerpt. © Reprinted by permission. All rights reserved.

Introduction

The start of the rivalry between the Pepsi-Cola and Coca-Cola companies in the 1940s is legend in business. Less known is that a bigger, more important battle was being fought on the front lines of the cola wars at the same time: the struggle ofAfricanAmericans to gain access to white Corporate America. Underdog Pepsi-Cola -- under the direction ofan astute businessman with a keen sense of his role as a leader -- joined forces with a group of striving African-American professionals. Their union made history, and taught American businesses a lesson in the value ofa diverse workforce.

To the ranks of the unsung civil rights pioneers, add Pepsi's first special-markets sales staff. Instead of schoolrooms or lunch counters, their struggles and victories took place in offices, storefronts, and factory floors. You haven't heard the names of these men in the myriad books written about the cola wars over the decades. They were workers whose talents were hidden in plain sight because of their race; their stories played out before the civil rights revolution. Businesses were just awakening to the potential of a diverse work place and untapped markets.

The Pepsi-Cola experiment began in 1940 with the hiring of a single black man, Herman T. Smith, and was followed by the addition of two young business interns -- Allen L. McKellar and Jeanette Maund. Their mandate was to help Pepsi-Cola -- then a struggling upstart -- expand its consumption among African-American customers.

Some seven years before Jackie Robinson and Larry Doby integrated baseball's major leagues, these national sales representatives broke through the corporate color line. In retrospect, the Pepsi salesmen had even more of an uphill battle. Integrating sports meant creating opportunities for a few uniquely talented individuals for the sake of everyone's entertainment. Integrating business, by contrast, was a far more sweeping -- and for some, threatening -- proposition in white society: an invitation to the rank and file of an entire race to vie for the same jobs as everyone else in the corporate hierarchy. Yet, the business pioneers were optimistic. "Conditions are far from perfect, of course," said Maund in polite understatement during an interview at the time, "but if we can do what we have against obstacles, surely we need not be afraid of our future."

World War II interrupted the development of the special-markets department. Once the war was over, however, a renewed effort began with an even greater impetus to succeed. The victory over Hitler had encouraged social reformers in the United States to work toward making the world more just and egalitarian. It also was a time offerment in the business world -- the democratization of commerce itself. Companies were perfecting mass distribution and getting to know their consumers as individuals with particular tastes. Business leaders were beginning to see their employees as valuable contributors to their companies' success. "It was a contribution to social progress," said Edward F. Boyd, who joined the Pepsi-Cola Company in 1947as assistant sales manager and was put in charge of selling to what was then called the Negro market. "I didn't make that much of a dollar. I wasn't paid on the basis of other executives. It was at the beginning. "

Boyd was an astute judge ofcharacter, and gathered and trained a talented marketing force. Sales of the cola surged wherever the team members went; at one point they helped Pepsi outsell all its rivals in some Northern cities. It was an object lesson for other companies that were ignoring the African-American consumer and standing on the sidelines when it came to integrating their professional staffs.

On their way to nudging their country to a better place, the sales team helped define niche marketing some thirty years before it became a widespread business strategy. They gave formal talks to white driversalesmen about their role in the company, thereby instigating some of the earliest formalized diversity training. They also helped to instill in African-Americans a unique sense of brand loyalty -- to products produced by companies with a commitment to social progress as much as to product quality.

Pepsi's innovation was remarkable for its day. It took a boss with the pluck and foresight of Walter S. Mack, Jr. , who led Pepsi-Cola from 1938 to 1950. He gave the team the personnel, budget, and creative freedom to explore the market on a national scale, and fully recognized its clout. "One of the truly great pleasures I have is in helping other people, giving a guy a job so that he can build himself up," he once wrote.

It didn't matter to Walter Mack that in Coke he had a rival that was linked in the American psyche with Santa Claus and the American G. I. He was the feisty, progressive New Yorker pitted against a gentleman of the Old South, Coca-Cola president Robert Woodruff, an executive known for his opposition to "racial mixing"on the job or in society at large. Mr. Woodruffdid give generously to black universities, but that kind of generosity only helped prop up the system of segregation. When Mack made contributions, they were tied to opportunities and focused on individuals. It made all the difference.

This is not to say that Walter Mack was a starry-eyed do-gooder. Above all, he was motivated by the bottom line. When he looked at black, he also saw green. African-American leaders themselves had shrewdly pushed the idea to businesses that the population of fourteen million blacks in the United States represented a gold mine of pent-up consumer demand, and Mack wanted his share. None of this big picture was lost on the salesmen, who were realistic about their roles at the company. "I adored the man, but all he cared about in the end was one thing: selling Pepsi," said Boyd of his boss. "That was always foremost in his mind."

On the road, the team members became role models at a time when few Americans had ever seen a young black man with a corporate business card. But the corporate office was a lonely place for African Americans in the 1940s. Back at headquarters, the very presence ofthe special-market salesmen raised touchy questions: Would black Americans fit into Pepsi-Cola's corporate culture? Could the company help develop these promising careers and keep them in the corporate family? How could management promote the men above their narrow specialty to leadership roles that guide the company as a whole?

That was the real Pepsi challenge.

The Pepsi team itself had no role models, yet somehow its members were superbly prepared for the task at hand. Working with limited resources, they crisscrossed the country to speak in black churches, women's clubs, civic centers, fraternities, campuses, and convention halls. Boyd and the Pepsi staff created advertising that was among the first to show African-Americans, and hired some of the first professional black models. Their work made a mockery of the degrading images of blacks prevalent at the time in both mainstream and black media. They dared to create ads celebrating African-Americans of achievement. Their most popular series of ads ended up as a classroom teaching tool in African-American high schools and colleges around the country. More shocking still for its day were their ad campaigns that portrayed blacks as stylish, fun-loving, middle-class citizens living the American Dream.

The Pepsi team's accomplishments were all the more impressive considering the enormous obstacles they faced in the segregated America of the day. They were traveling salesmen who had to sit in the backs of buses, ride in separate train compartments, and eat behind closed curtains in dining cars. Because many restaurants and hotels across the country didn't want their business, they often had to rely on a network of families willing to give them food and lodging in their homes while on the road.

With innate gifts of tact, humor, and sheer grit, the salesmen successfully navigated this demoralizing minefield. If their sojourn in Corporate America was often filled with disappointments, the team members rose above them."I knew what the mission was," said Harvey C. Russell, one of Boyd's more inspired hires."There were no other places you could get that type of job. Pepsi was really the first. They, and a couple ofothers, were the only ones that had these black sales people."

In all, Boyd hired at least sixteen men during the four-plus years his team was active. At its peak in size and responsibility, Boyd had eleven men under him. The experience of these dozen men is the focus of this book. Six of them lived to tell their stories here: Edward F. Boyd, a onetime actor and singer in films, who was working for the National Urban League when he was picked to create the special-markets team; Allen L. McKellar, who first joined Pepsi as an intern in 1940 after he won a company essay contest and returned in 1950; Charles E. Wilson, a graduate of Virginia's Hampton Institute with a dream of becoming a doctor; William Simms, who was ordered by the great American thinker and human-rights advocate W. E. B. DuBois to get an education and get ahead; Jean F. Emmons, one of the few black MBAs in America; and Julian C. Nicholas, who came from a family of businessmen -- and especially businesswomen -- with a drive to succeed.

Two more -- Harvey C. Russell and Richard L. Hurt -- were interviewed for my 1997 Wall Street Journal column on the Pepsi team, but have since died. Other team members whose contributions are greatly missed include David F. Watson, H. Floyd Britton, Harold W. Woodruff, Alexander L. Jackson, Frank L. Smith, Winston C. Wright, Paul D. Davis, and William E. Payne.

After the breakup of the team, most ofthe men went on to remarkable second careers in international business, politics, journalism, medicine, and education. One, Harvey Russell, became a vice president at Pepsi-Cola in 1962, the first African-American to earn that title at a major corporation.

The life stories of the Pepsi salesmen connect us to the depth and complexity ofthe African-American exp... --This text refers to an out of print or unavailable edition of this title.

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